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July 18, 2024

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The neo and MAX families keep Airbus and Boeing chasing higher production rates as supply chain constraints plague the industry. Are they performing well enough to justify the industry’s continued record orders and backlog? To answer that question, we turned to the Skailark database to examine fuel burn, the critical element differentiating the cost structure between older and newer models.

The older ceo and NG models and the neo and MAX models have similar infrastructure costs, virtually identical crew costs, and similar maintenance costs, including by-the-hour engine maintenance contracts. The net result is that fuel burn is the key element that impacts operating economics.

We aggregated several variables by analyzing data from Skailark for North American and European airlines from 2019 through the third quarter of 2023. We excluded aircraft converted from passenger to freighter configuration and examined the eight aircraft types that provide a comparison on an apples-to-apples basis across two metrics. The first is gallons per block hour, a measure of fuel efficiency where the lower the number, the better. The second is ASMs per gallon, a measure of how well the aircraft economically transports passengers; the higher, the better.

Of course, during the model change-overs from the ceo and NG families to the neo and MAX, seating density has risen as airlines take advantage of improvements to aircraft interiors. These improvements generate economic improvements that, while not fuel-burn-driven, impact the overall economic comparisons. Similarly, increases in range can impact fuel efficiency, as longer-range routes are more fuel-efficient than short-range routes.   We have not adjusted for these effects but feel the results are interesting.

The answer, in a nutshell, is yes, the efficiency improvements do merit the increased backlog and sales for new models, but the differential performance isn’t uniform across the board. As reflected in the order book, some models perform better than others.

The following table shows the percentage improvement for the new model over the older one it replaces. We show fuel burn per block hour, a direct cost measure, and available seat miles per gallon, a measure of how efficient the new aircraft performs vis-à-vis the older model.

Data courtesy Skailark

From a fuel burn perspective, most have a double-digit improvement in fuel gallons per block hour, except the base A320neo model at 6.9%. This contrasts with the A321neo, which shows a 16.1% improvement over its predecessor. Our data include CFM International LEAP and Pratt & Whitney GTF engines, and we did not calculate improvements by engine type.  On the Boeing side, the 737 MAX8 shows a strong improvement over the 737-800, while the MAX9 showed the most significant improvement over the 737-900ER, which may have been expected given the 900ER’s lower performance levels.

The metric of available seat miles per gallon reflects the true operational efficiency of the new model, and the following table shows the results for that metric in descending order.

author avatar
Ernest Arvai
President AirInsight Group LLC